Anyone interested in following the licensing and business path outlined by chipmechanic should read the BATF NFA Handbook. Not that he's wrong, it's just that the BATF is the penultimate authority on the matter

5.1.3.7 Business premises. The applicant must have a permanent premises from which business is to be conducted. The applicant must certify that conducting business from that location is not prohibited by State or local law; that within 30 days after license approval the business will comply with State and local laws applicable to the business and business will not be conducted until State and local requirements have been met; and that the chief law enforcement officer at the proposed business location has been advised of the intent to apply for a license.

5.2.6 Collectors acquiring NFA firearms for their personal collections by acquiring dealers’ licenses and paying NFA special tax. Some NFA firearms collectors, who are not engaged in any firearms business, have been known to acquire a GCA license to deal in firearms and pay the NFA special tax to acquire NFA firearms for their personal firearms collections. They do so for a number of reasons: (1) to acquire firearms from nonlicensees residing out-of-state; (2) to circumvent requirements imposed on individuals to provide their fingerprints and photographs in order to receive NFA firearms and law enforcement certifications authorizing their receipt of such firearms; and (3) to avoid NFA transfer tax on firearms they receive from FFLs/SOTs.

Warning: These transactions violate the law and can only lead to trouble for the collector. In these instances, the collector has committed Federal felonies by falsely stating on a license application and special tax return that the collector intends to conduct a firearms business. Any NFA firearms received tax free by the collector are subject to transfer tax and the collector’s receipt of the firearms tax free violated the NFA. As held in ATF Ruling 76-22, these transfers are unlawful and the firearms received are subject to seizure and forfeiture.

Not a problem, a part-time business might be just what a lot of people are looking for.

We're pretty easy going about guns here in South Dakota, but generally, throughout the state, a house in a residential zoned area cannot be used for storefront activity. Whether guns or marshmallows, it doesn't matter.

So, plan on a rental property in a commercially zoned location, and meeting local ordnances.

It really is more than just applying for and paying for licenses. Not trying to say it can't be profitable and fun, but saying find out all the aspects of becoming an SOT. It's not "hobby" effort, it's a real business.

The state I live in is full of home businesses . They can be fun and profitable and the state will grant a business license for practically anything the law allows as long as the city allows it andI was never turned down for an ffl, manufacturers license or importers license.. If you keep all the paperwork straight. A few hours a week is all it takes to run an SOT and keep it legit. It all depends on what state your in. The majority of the SOT holders in my state are run from their homes more because the market is so small for NFA products since the only thing allowed for non SOT holders are DD's and silencers and even then silencers are not allowed to be used.I know.

Only dealers can get the $500 a year SOT license, to get around it being not allowed to produce any more fullauto guns. A buddy of mine is a dealer and has several SOT weapons, when I mentioned getting your FFL just so you could get cheap fullauto weapons and pay $500 a year for it (besides your $600 a year FFL license), he said the ATF isn't that stupid and when they see you haven't made a business buying and selling guns, but you've aquired "demo guns" they would go after you for tax evasion. Either they're dumber than I think, or maybe your not as smart as you think you are. Question is, if they were to go after you for trying to fake the system, how deep are your pockets for the fees a good lawyer will charge.
Anyhow, how is the paper work easy to get?? The business address can no longer be the same address as your home, you must have a separate address for your FFL if I'm not mistaken, the license cost for that is $600 a year now, and the SOT tax on each and every fullauto firearm you have is $500 a year.

This is interesting, you would assert that they get you for tax evasion, but it is for a tax payment they won't accept ( $200 tax stamp for a new personal full auto). Seems to me you would have one hell of a case, either you can proceed this way or they have to accept your application, can't have it both ways.

Of course i know nothing of this subject, just an interesting though....

An SOT is a Special Occupational Tax. It gets paid once a year and allows the holder to manufacture NFA classed weapons for evaluation or sales to law enforcement or military clients and to transfer weapons to them requires a letter from the purchasing dept of the agency. SOT's cannot receive or transfer non transferable post 86 weapons without a law enforcement letter authorizing that particular weapon to be transfered. The SOT manufacturer can build weapons for eval or potential sales on a law enforcement letter but may not transfer them to other dealers with a letter. Law enforcement and military do not pay a transfer tax. Individuals cannot receive post May 86 MG's so there is no tax to be received from them.

Chip and SJ.

Reading all with interest. I am trying to import parts and talking with the A.T.F. and other Govt. agencies on a weekly basis. Good info provided thank you.
Just one correction. "Silencers" can be "Legally" purchased and used in some states. I had planned on purchasing one and the problem was not the
L.E.O.s on my end. It was the ATF and the living hell of the paperwork. Plus they ain't cheap. Gun silencers

"Man needs but two things to survive alone in the woods. A blow up female doll and his trusty old AK-47" - Thomas Jefferson 1781

Or you could just roll your own silencer. Ive got a form 1 to the ATF out right now to make a silencer for my AK's. I'll be doing a write up on this forum on how to go through the whole approval and build process once I get the approved form 1 back. You can build a silencer that will match the performance of the higher priced units although it will be bigger and heavier.